Ne. Med. Servs., Inc. v. Cal. Dep’t of Healthcare Servs. (Summary)

MEDICAID ACT

Ne. Med. Servs., Inc. v. Cal. Dep’t of Healthcare Servs., No. C 12-2895 CW (N.D. Cal. Feb. 1, 2013)

The United States District Court for the Northern District of California granted one motion to dismiss and granted in part and denied in part a separate motion to dismiss.  A non-profit health center brought suit against the government and the state department of healthcare for violations of the Medicaid Act.  The non-profit claimed that the federal government mischaracterized its financial reporting requirement and that the state department of healthcare violated the Medicaid Act by not providing on-time reimbursements to the non-profit.

The district court dismissed the claims against the federal government for lack of jurisdiction.  The court stated the letter sent by the government was not an agency action that could be reviewed by the court.  The letter was a summary of the U.S. attorney’s investigative findings and clearly indicated that it was for the sole purpose of negotiating a settlement.  The court did not believe that the letter had any impact on the non-profit’s legal obligations.

The district court dismissed one of the non-profit’s claims against the department of healthcare because it did not allege a concrete injury.  The court held that claiming a compliance dilemma existed between the government’s letter and state law was too broad.  The state healthcare department did not play a role in the drafting of the letter.

The district court allowed the non-profit’s claim of timely payments to survive the motion to dismiss.  The court held that the non-profit was entitled to full compensatory payments every four months, as indicated by the Medicaid Act.  The department’s policy of providing interim prospective payments was not a satisfactory method of payment.